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Supreme Court gives guidance on modular trials
PRACTICE AREA GROUP: Commercial Litigation and Dispute Resolution
Modular trials can be a feature of litigation in Ireland before the Commercial List of the High Court. Numerous authorities have set down the rationale for imposing modular trials and have determined the test to be applied when considering whether a particular case is appropriate for or susceptible to modular trials. However, the Supreme Court recently issued its views on the holding of modular trials in the context of an appeal from a Commercial Court decision of Judge Charleton in Weavering Macro Fixed Income Fund Ltd v PNC Global Inv Servicing (Europe) Ltd.(1)
During its ruling, in which it directed that a modular trial take place in respect of eight issues, the Commercial Court identified trends in litigation practices which have resulted in litigation becoming increasingly unwieldy and expensive. In acknowledging the Commercial List rules which permit improved case management, and on reviewing prior authorities, the court identified modular trials as "one of the essential instruments at a court's disposal for the proper structuring of a complex trial". It also suggested that in considering whether to direct a modular trial, the court must balance between:
"[a] diffuse and lengthy trial hearing on multiple issues or choosing instead a preliminary and much shorter hearing on particular central questions which may be determinative of the ultimate issues of trial or which, at the least, will introduce focus and concision to the trial process."
Here, the Supreme Court was asked to consider the legal principles applicable to the directing of a modular trial.
Supreme Court role
The jurisdiction of the Supreme Court to interfere in case management orders made by the High Court had previously been considered in a slightly different context in Dowling v Minister for Finance,(2) where timetables imposed by President Kearns of the High Court were complained by the appellant as being unfairly prejudicial. In that case, the Supreme Court observed that:
"this Court should only intervene if there is demonstrated a degree of irremediable prejudice created by the relevant case management directions such as could not reasonably be expected be remedied by the trial judge (or at least where the chances of that happening were small) and where therefore, unusually, the safer course of action would be for this Court to intervene immediately to alter the case management directions."(3)
It further noted its decision in PJ Carroll & Co v Minister for Health & Children(4) to the effect that, in Commercial List matters:
"as a general rule this Court should be slow to interfere with case management type orders in the Commercial Court unless there is a clear error of law involved or the managing judge has clearly not exercised his or her discretion correctly."
Accordingly, in Weavering Judge Clarke for the Supreme Court acknowledged that it should be slow to interfere with case management directions. However, the court noted that the range of orders involved in a case management process can vary significantly and that a factor to be considered is the extent to which the case management order under appeal might be said to have a potentially fundamental impact on the proceedings.
The Supreme Court reviewed the authorities pertaining to modular trials and the principles to be applied in considering whether to direct such hearings. In particular, Judge Clarke cited at length from his own High Court decision in Cork Plastics Manufacturing v Ineos Compound UK Ltd(5) where it observed that the default position was to have a single trial of all the issues at the same time, although other factors could militate against such an approach, principal among which was the length and complexity of the likely trial. It also referred to McCann v Desmond(6) where the Commercial Court had posed a number of questions a court might consider in deciding whether to direct a modular trial,(7) and to Atlantic Shellfish v Cork County Council(8) where Judge Laffoy also had to consider the factors relevant to directing a modular trial.
Based on the case law, the Supreme Court derived the following principles:
As part of its inherent jurisdiction to regulate the manner in which trials are conducted, the court has jurisdiction to direct a modular trial, as a result of which some issues are determined ahead of others.
There is a distinction to be drawn between the trial of a preliminary issue and a modular trial of all the issues. Determining a preliminary issue in respect of particular legal or factual question is a practice to be adopted with the greatest of care and involves separating that issue from others in the action where the preliminary issue involved will be (largely) determinative of the case at hand. By contrast, where issues are tried in a modular trial, the court will hear all matters relevant to those issues, be it fact or law, and come first to a conclusion on those issues.
- Where an application for a modular trial is brought, there are a range of practical circumstances to which the court should have regard in determining whether, in reality, there is likely to be a net benefit in directing a modular trial. Those factors, said the Supreme Court, have been variously described, with no material differences, in previous cases (eg, in Cork Plastics, McCann v Desmond and Atlantic Shellfish).
Against the background of that analysis, the Supreme Court then went on to consider the specific issues that arose in this case and ultimately questioned whether the modular trial as ordered was appropriate in the case. Before reaching its conclusion, the court observed that the factors that may be important in determining where the balance lies can vary from case to case depending on the relevant facts. Ultimately, however, it felt that this was a rare case where it was appropriate for the appellate court to intervene against a case management direction. Here, it felt that there was:
"a significant risk that the case management direction in this case could have a very significant practical effect on the run of the case to the real (rather than tactical) detriment of one of the parties."(9)
It felt that the modular trial directed was insufficiently clear and precise. Indeed, it commented that if it was a purely theoretical exercise, it would run the risk of either achieving little or creating the potential for injustice. Conversely, if what was intended required delving into the facts in any great detail, it was hard to see any advantage. Therefore, the Supreme Court upheld the appeal and set aside the direction for a modular trial.
The decision is important because it represents a clear statement from the Supreme Court with regard to the circumstances in which it will interfere in a case management decision. Although the general approach will be to defer to the trial judge who has made the relevant case management order, in considering modular trials regard will necessarily be had to the impact of the modular trial directed on the outcome of proceedings as a whole. Although this will vary from case to case, this factor is necessarily now a serious consideration for the trial judge in directing a modular trial and for a party in seeking one.
For further information please contact Gearoid Carey by telephone (+353 1 232 2000), fax (+353 1 232 3333) or email (email@example.com).
(1)  IESC 60.
(2)  IESC 32.
(3) Ibid, para 3.5.
(4)  1 IR 294.
(5)  IEHC 93.
(6)  4 IR 554.
(7) In summary, these were as follows:
• Are the issues to be tried by way of a preliminary module readily capable of determination in isolation from the other issues in dispute between the parties?
• Has a clear saving in the time of the court and the costs that the parties might have to bear been identified?
• Would a modular order result in any prejudice to the parties?
• Is a motion a device to suit the moving party or does it genuinely assist the litigation by being of help to the resolution of the issues?
(8)  IEHC 294.
(9) Para 7.19.